Red chip Cosco Pacific said its interests in container manufacturing operations would be merged with its holding company's as part of a corporate overhaul now under way. Vice-chairman Zhang Dachun, also president of holding company Cosco (Hong Kong) Group, yesterday said the restructuring would result in a British Virgin Islands-incorporated firm holding stakes in four container-making operations. Cosco Pacific now holds interests in three of them, including 20 per cent of Shanghai CIMC Reefer Containers, 15 per cent of Shanghai Far East Container and 22.5 per cent of Tianjin North Ocean Container. Cosco (Hong Kong) holds a 23.5 per cent stake in the fourth - China International Marine Containers (Group). Mr Zhang would not divulge the estimated asset value of the newly-merged entity and also declined to reveal whether the Bermuda-registered company would come under the control of Cosco Pacific. He also refused to say whether the merger would involve consideration between the listed company and the holding company. Cosco Pacific deputy managing director Kelvin Wong Tin-yau denied the company would be spun off from the group for a separate listing, saying it was an attempt to boost competitiveness amid a slowing sector. Mr Wong said the company would sign official agreements today for a two-year commercial-paper programme to raise up to US$130 million. The proceeds would be used to buy containers for leasing purposes, he said. Mr Zhang said Cosco Pacific had bought 50,000 teu (twenty-foot equivalent units) in the first half and expected to buy between 70,000 and 90,000 teu for the full year, against last year's 126,706 teu. The company generated the bulk of its income from container leasing to customers using its holding company's vessels, in addition to terminal throughput operations. Slowing container purchases have been capped by a downturn in traffic. This year, the holding company planned to add only one new South Korean-made container vessel with a capacity of 3,400 teu, against last year's 13.
